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While few homeowners would object to lower utility bills, many
have eschewed residential solar power systems because of the
upfront costs--which can be equal to the price of a new car. But
just as consumers have embraced the option of leasing
automobiles, there has been a shift in the residential solar
energy market, with increasing numbers of homeowners installing
leased systems. A report by the Solar Energies Industry
Association found that residential solar installations increased
11 percent from 2010 to 2011, driven primarily by third-party
ownership.

OneRoof Energy is banking on this new
approach. The San Diego-based company leases its residential
systems--which can cost $30,000 to $40,000 if purchased
outright--and has agreements with contractors for
installation. The homeowner pays little or nothing upfront but
has a monthly leasing fee and, presumably, a vastly reduced
electric bill. Typical users see savings of 15 to 25 percent
off their monthly expenditure on electricity, according to
OneRoof president and CEO David Field.

Bringing its SolarSelect Lease program to market required some
creative fundraising. In addition to raising working capital,
OneRoof needed to create a specialized tax equity fund that
purchases the residential leases and takes advantage of breaks
like the investment tax credit, which reduces the tax liability
for companies investing in solar projects.

A few investors saw the light. Hanwha International, part of
Korean conglomerate Hanwha Group, led a $50 million round that
closed in September 2011, followed by a $3 million infusion in
March from Black Coral Capital, a Boston-based clean-technology
investment firm. Black Coral vice president Nikhil Garg says his
team was impressed by OneRoof's sophisticated approach to
financing. Field expects to close another round later this year;
it could be as much as $100 million for the tax equity fund and
another $20 million in working capital.

OneRoof is limited in its expansion opportunities. There are
fewer than 10 states with the right ingredients--sun saturation,
high electric rates, favorable regulations and local incentives
such as tax concessions or rebates for installation--necessary
for the company to be profitable, Field says. However, that may
change as the price of solar components continues to drop and
regulatory environments become more favorable.

Since the introduction of the Solar-Select program in October
2011, OneRoof has expanded from California into Hawaii;
additional operations are planned for Arizona, Massachusetts,
Connecticut and New York. OneRoof systems have been sold into
"several hundred" homes, Field says, noting the company is on
track to complete about 4,000 residential installations in 2012,
valued at $120 million.

"People want the energy off the solar rooftop, not necessarily
the hassle of buying a solar system and getting it installed and
maintaining it," he says. "This is just a much better way to
serve homeowners."